Category Archives: Economic Analysis

Another V-Bottom in S&P 500?

After a 61.8% Fibonacci retracement of Thursday’s high-low range on Friday, the S&P 500 may be preparing for another V-bottom and new all-time highs. This year we had 3 major V-bottoms in the index and last year there were 4 more. … Continue reading

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The Equity Vs. Bond Funds War Has Started (Again)

According to a major financial website two famous investors declared bonds a bubble yesterday and argued that the only place to put money is stocks. This is an example of wishful thinking and shows a bias when analyzing markets that depends on personal goals but also … Continue reading

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Borel’s Law and the Stock Market

A popular science interpretation of Borel’s Law is that phenomena with very low probabilities do not occur. Given that the rally in stocks has lasted for more than 5 years and the Fed promise to keep interest rates low for a long … Continue reading

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A 52-Week Low in BDI a Result of Slowing Global Trade

If the Baltic Dry Index (BDI) falls below 800 for an extended period of time during which many time charters will expire, this could spell trouble for some over-leveraged shipping companies. The 52-week low last Friday is a result of … Continue reading

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Massive Layoffs May Contribute to a Continuation of the Equity Bull Market

It appears that the easiest thing CEOs can do at this point to keep the price of their stock going up and their salaries growing is to engage in massive layoffs. That can push the unemployment rate above 6.5% and also help contain inflationary pressures with the personal … Continue reading

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The Law of Diminishing Returns Starting to Hit Diversified Portfolios

Since 2010 and well after the introduction of quantitative easing, which has helped the economic recovery, the returns of diversified portfolios are decreasing and have reached levels that may not justify further investment risk. That can prompt a massive move into cash and the … Continue reading

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Interest Rates May Rise Soon

The 10-Year Note yield has been in a 21 bps range during that last 45 days. Analysis of yield action since the 1960s shows that when yields were on an uptrend, similar sideways action has failed only once to signal a rise of … Continue reading

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